China's Large Enterprises and the Challenge of Late Industrialization

China's Large Enterprises and the Challenge of Late Industrialization

Synopsis

Considers the 'late industrialisation' of China, showing how government policies have encouraged the development of 120 'national champions', and how these compete with multinational enterprises.

Excerpt

This book is based around my PhD thesis. the research I undertook for the thesis was associated with the China Big Business Programme in the Judge Institute of Management Studies at Cambridge University, England. This programme brought together industry leaders from both China and the West and used a selection of case studies on some of China’s leading firms to expose the major issues in the emergence of big business in China today.

At the very start of my research, the objective was to contribute to these case studies. My plan was to carry out a detailed investigation on the auto industry in China. Shortly after starting though, I became interested in another area of China’s reforms. in the mid-1990s, short press reports in the Chinese media were beginning to mention China’s plans to develop a batch of large enterprise groups, dubbed the ‘national team’. the trickles soon grew to a steady flow. These snippets of information drew my attention away from the more specialized area of the auto industry and a curiosity in the broader topic of the national team developed.

Initially, I searched through the Western media and academic press but could find little of substance on China’s plans to build the national team groups. What seemed like a central component of their industrial policy remained a frustrating mystery. Given the earlier successes of enterprise groups in Japan and South Korea it seemed particularly strange that China’s efforts had attracted so little attention. the increasingly obvious intentions of the Chinese government to attempt to emulate their East Asian neighbours (through what became known as the ‘grasping the large, letting go of the small’ policy) made this omission all the more curious.

For the first year of my research, based in the United Kingdom, most of my insights into the large groups of the national team remained limited. By the late 1990s, however, a few academic articles began to hint at the increasingly important role of the large-scale sector in China’s late industrialization. These findings contrasted sharply with mainstream opinion which had argued, even until the late 1990s, that there was little future for China’s incumbent large enterprises. I became even more convinced that the national team really was important - that an understanding of this select group of companies might also contribute towards the debate on the large-scale sector, as well as to far broader questions related to economics and development.